Movies Help Vivendi's Sales Leap

In its first report since the merger with Universal, Vivendi chairman Jean-Marie Messier announced a 77% rise in EBITDA (to 2.2 billion euros, about $1.9 billion) and a 15% hike in sales, to 12.4 billion euros (nearly $10.8 billion)—including Universal Studios. For the second quarter of the current calendar year ending June 30, revenue grew by 16%. (Note that all figures concern media and communications businesses; Vivendi Environment, although 72% owned by Vivendi Universal and accounting for just over 50% of total group sales, is not covered by the released figures.)

While results at the Vivendi Universal Publishing division (VUP) were satisfactory over the half-year, with sales up 3% to 1.6 billion euros (nearly $1.4 billion) and EBITDA up 11%, there was an "expected" 6% decline in the second quarter. This was attributed to the lack of major game releases and the seasonal nature of trade shows—VUP is a challenger for world market leadership in games, and fairs are a major source of income in its professional publishing division.

Last year, VUP accounted for 7% of group turnover, a figure expected to change as the recently acquired Houghton Mifflin is integrated. (The group predicts significant double-digit growth in publishing EBITDA for the third quarter.) At the same time, the professional division of VUP—consisting chiefly of the B2B press, consumer publications and trade fairs, together accounting for sales of $1.1 billion last year—has been deemed a noncore business and is reportedly on the market, with Reed Elsevier on an inside track and both Bertelsmann and VNU in the running. Messier's decision to hive off a major pillar of VUP suggests an overall policy decision to focus on book publishing and entertainment throughout the company.